GBP/USD: Fishing for a Brexit deal opens border to the upside

GBP/USD has been rising as panic over the new covid strain receded. The cable has an open road to rally as French border easing may precede Brexit deal, according to FXStreet’s Analyst Yohay Elam.

Key quotes

“The lorries are leaving – slowly at first, but the massive traffic jam around the British port of Dover is beginning to clear. France has eased the travel ban and agreed to allow goods to flow across the English Channel – provided drivers show a negative coronavirus test.” 

“The fishing industry is minuscule, around 0.2% of both economies at best – and the differences in talks may be smaller after compromises from both sides. All in all, there is optimism that both sides could find creative solutions to satisfy their fishermen and women – and not let a major accord fall due to a minor economic disagreement. Will it happen on Wednesday, ahead of Christmas Eve? That is far from guaranteed, as the only genuine deadline is December 31, when the transition period expires.”

“Sterling could be impacted if the PM decides to add more regions to severe Tier 4 restrictions ahead of the holiday. The rapid spread seems to justify tougher measures, yet it would depress Brits and adversely impact sterling.” 

“The US calendar is packed with data, including jobless claims, Durable Goods Orders, and others. They will likely move the dollar, yet the greater gyrations are set to come from Brexit.” 

“Resistance awaits at 1.3445, the daily high, followed by 1.3475, 1.3535, and 1.3622. Support is at 1.34, the round level, and then by 1.3305, 1.3225, and 1.3190.”